Are NY firms going to $190K

Is there any truth to the rumor that NY firms are going to $190K at the end of the year? If so, I would assume 2009 Summer Associate Pay would also go up, right? Furthermore, how does it impact bonus structure?

First, it is highly unlikely they will go up. Many of the NY firms are cutting back on their summer classes. The financial market's continued downfall isn't making anything easier. If some do raise, I doubt it will be a universal raise like the last one was (probably only the cravath level firms will follow)

Assuming by some miracle they do go up, summer associate pay should go up accordingly. Summer pay is, on average, what the first year associates are making. I dont know any firms that didnt raise their summer salaries to 3077-3100 when they raised their starting salaries to 160K last year.

Also, as far bonuses go, they will probably shrink at most firms. It seems like firms want to raise the salaries to avoid losing people but have to get the money from somewhere. Also, many of the firms will probably implement the step pay scale thing that some have now (where you get 10K less than market (as far as base salary goes) or something like when you hit 1800 hours, then market at like 2100 hours). This is just my prediction. I wouldnt count on 190K though.

This rumor feels like it's been around forever (since the day after they went up to $160k).

I agree with thorc's post - it's highly unlikely. IF it were to happen, first, it would be a few select firms and probably not across the board since I think some firms are finally realizing that's a ballgame they're not in a position to play. Second, bonuses would likely take huge hit.

Not to mention it would just be a short-term fix. Sure, you would start at 190k, but your salary wouldn't move for the next 4 years. I don't see that boding well for retention of more senior associates.

it'd be nice to see some sort raise in NY (at least in NYC) as living in NYC is not cheap. for example, only in NYC do you have to pay a "city tax." city tax, at the 160k base pay rate, comes to some 6-7k per year in additional tax revenue taken out of your pay check. this is not a modest sum. true, you can avoid this tax by living in new jersey, but then you're commuting a semi significant distance and, uh, living in new jersey (which, imho, sort of defeats te purpose of being in NYC in the first place).

anyway, the point is the NYC is an incredibly expensive place to live - much more expensive than say DC, TX, TL, and CA (excluding a few select areas in SF). traditioanlly, NYC paid the top market rate for this precise reason. if you wanted to attract the top people, you had to pay the top rate (which, when coupled with the allure of nyc itself and th prestige of the whole "nyc biglaw" thing, made for an attractive package). now, many markets pay the same rate. in a lot of ways, those of us who are earning market in NYC (an turned down other markets which pay at the same wage) are paying a not insignificant sum to be surrounded by the big buildings and the pretty lights. with student loans payments and the like pending, you have to wonder if its really worth it.

i think that a lot of people are saying "no" these days and going elsewhere. unfortunately, as thorc accurately pointed out, most NYC firms are incapable of making bonus this year, let alone raising to some ridiculous first year wage. the reality (and i've heard it form the managing partner of our associates' committee) is that 1) clients are unwilling to subsidize 190 for first years and are grumpy about paying 160 as is, 2) 98% of NYC firms jsut don't have the available capital to legitimize such a move without either firing support staff or lowering your 2nd, 3rd, and 4th year pay scales, and 3) the 190k myth is more of a law student driven myth than anything else; very few firms have discussed it in a serious context.

you might it see it at a small handful of NYC firms (i.e. the 2500+ mandatory billables sweat shops) make the move sometime within the next year or two, but generally speaking it isn't happening.

it'd be nice to see some sort raise in NY (at least in NYC) as living in NYC is not cheap. for example, only in NYC do you have to pay a "city tax." city tax, at the 160k base pay rate, comes to some 6-7k per year in additional tax revenue taken out of your pay check. this is not a modest sum. true, you can avoid this tax by living in new jersey, but then you're commuting a semi significant distance and, uh, living in new jersey (which, imho, sort of defeats te purpose of being in NYC in the first place).

False. Hoboken is just a ferry ride away from downtown manhattan and it is cheaper and more convenient that many parts of Manhattan, and certainly better than the other boroughs.

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1) clients are unwilling to subsidize 190 for first years and are grumpy about paying 160 as is, 2) 98% of NYC firms jsut don't have the available capital to legitimize such a move without either firing support staff or lowering your 2nd, 3rd, and 4th year pay scales, and 3) the 190k myth is more of a law student driven myth than anything else; very few firms have discussed it in a serious context.

Right. Firms already lose money on first years at 160K, 190 isn't happening in this economy.

Hoboken is just a ferry ride away from downtown manhattan and it is cheaper and more convenient that many parts of Manhattan, and certainly better than the other boroughs.

In what sense? You are, of course, entitled to your opinion, but this language is fairly strong. I happen to like Brooklyn much more than any part of Jersey City or Hoboken I've ever been. (And I was once in a band that played an ode to Hoboken from back when Maxwell's used to have good shows.)

Hoboken is just a ferry ride away from downtown manhattan and it is cheaper and more convenient that many parts of Manhattan, and certainly better than the other boroughs.

In what sense? You are, of course, entitled to your opinion, but this language is fairly strong. I happen to like Brooklyn much more than any part of Jersey City or Hoboken I've ever been. (And I was once in a band that played an ode to Hoboken from back when Maxwell's used to have good shows.)

I guess it depends where you are commuting to. But my comment is not related to likeability, i was commenting on convenience and price.

It takes much longer to get to downtown Manhattan from some parts of Queens, for example, than it would from NJ.

Hoboken is just a ferry ride away from downtown manhattan and it is cheaper and more convenient that many parts of Manhattan, and certainly better than the other boroughs.

In what sense? You are, of course, entitled to your opinion, but this language is fairly strong. I happen to like Brooklyn much more than any part of Jersey City or Hoboken I've ever been. (And I was once in a band that played an ode to Hoboken from back when Maxwell's used to have good shows.)

I guess it depends where you are commuting to. But my comment is not related to likeability, i was commenting on convenience and price.

It takes much longer to get to downtown Manhattan from some parts of Queens, for example, than it would from NJ.

Oh, I understand. In that case, however, some parts of Brooklyn are equally if not more convenient, though. If your primary concern is having to pay city income tax, I suppose living in New Jersey has an advantage. (But I'm pretty sure the state still charges a non-resident personal income tax even though the Court of Appeals struck down the city's commuter tax a few years ago.)